NSE Nifty is making new highs, but momentum is not sustaining at higher levels. On Wednesday, 39 of Nifty-50 stocks closed with losses. In any case, if the Nifty closes below 23,400 pts, it is negative and can test 23,334 pts in a sharp decline. Below this, the rising channel support is at 23,270pts

Private-sector banks rallied with a vengeance on Wednesday. Only BFSI sectors were in the limelight. NSE Nifty declined by 41.90 points or 0.18 per cent and closed at 23,516 points. Bank Nifty is up by 1.90 per cent, and FinNifty has gained by 1.59 per cent. The private-sector bank index advanced by 2.01 per cent. Nifty IT gained by 0.36 per cent. The Nifty Realty index is down by 2.83 per cent, and the PSE index has declined by 2.16 per cent.

The Infra, Oil and Gas, CPSE, and Energy indices were down by over 1.5 per cent. All other sector indices are down more than half a per cent. The India VIX is up by 5.77 per cent. The Market breadth is negative as 1,574 declines and 1,112 advances. About 227 stocks hit a new 52-week high, and 124 stocks traded in the upper circuit. Indus Tower, HDFC Bank, HAL, and ICICI Bank were the top trading counters on Wednesday, in terms of value.

After a series of indecisive candles, the Nifty has formed a bearish engulfing candle at a new lifetime high. As stated earlier, the Nifty is making new highs, but momentum is not sustaining at higher levels. The Nifty breadth is negative on Wednesday, as 39 of Nifty50 stocks closed with losses. The Private Sector Banks are in the limelight. HDFC, ICICI, AXIS, and KOTAK Banks contributed over 150 points to the Nifty. But, the Reliance, L&T, Bharti Airtel, and ITC dragged the index into negative territory.

The Nifty closed almost at the prior day’s low, with higher volume, which is a distribution sign. The RSI is not sustained above 62 zone. The MACD histogram shows a decline in momentum. The private bank’s rally is due to the short covering on an expiry day. Now, the 8EMA support has risen to 23335. In any case, the Nifty closes negative it will give a reversal sign. The 10-day rally from the low of 4 June is showing a clear exhaustion sign. The MACD shows a clear negative divergence. If the Nifty closes below 23400, it is negative and can test 23334 in a sharp decline. Below this, the rising channel support is at 23270. Stay cautious now, as the upside is limited, and the index is not sustaining at higher levels.